A digital silver lining amid a crisis
DHL Express Singapore Managing Director Christopher Ong believes that the COVID-19 outbreak will fast-track digital transformation among SMEs
Even as local firms reel in the face of measures to deal with the spreading coronavirus, DHL Express Singapore Managing Director Christopher Ong thinks that the crisis is a much needed wake-up call for SMEs who have yet to make the leap into the digital age.
“Never waste a good crisis, our former CEO Ken Allen used to say. In this circuit-breaker environment, companies now have no choice but to leverage on digital to reach out to the consuming public,” he said.
He noted that the COVID-19 outbreak is likely to change attitudes among businesses and consumers when it comes to going digital; a mindset shift that is likely to continue even after the crisis ends. BizQ speaks to Mr Ong to get his views on this unexpected silver lining and DHL’s own digital journey.
Digital transformation has become a buzzword for businesses in recent years. How urgent has it become for SMEs to transform in the current environment?
Right now with the circuit breaker, it is very critical for all SMEs to look for digital ways of doing business. In this environment, they can’t use traditional means of marketing. For example, traditional F&B outlets have no choice but to jump on the digital bandwagon to reach their customers.
As such, the crisis is a fantastic opportunity for companies who were reluctant in the past to go digital, because now they have no choice. There is sufficient motivation for SMEs to take the leap and do things differently. This crisis can be the seed of something great in time to come, when we will see a lot more businesses moving towards digital payments and digital marketing. It will accelerate the whole digital transformation process.
How can SMEs who haven’t started on this journey make that first step?
There is no one-size-fits all solution. It depends on what sectors they are in. But there are simple things they can start doing, like accepting digital payments. That’s a simple and easy one to start with. There are so many platforms, whether it’s the banks or Grab, that they can approach for help in implementing a digital payments solution.
Once you get comfortable with digital payments, you can consider hawking your wares on a digital platform like Shopee or Lazada. It’s not just about online and offline anymore, but having an omni-channel offering where you still have your physical store, but also offer online options to your customers. This is especially important during this circuit breaker period when people still want to buy but can’t go to the shop.
And even after the circuit breaker is lifted on May 4, I don’t think things will go back to normal just like that. There are still going to be restrictions, but with an online presence consumers can still buy from you.
Why do you think local SMEs have been reluctant to go digital despite much urging from the government over the years?
A lot of it has to do with the fear of the unknown, or the fear of losing money. I’ve spoken to a lot of towkays who have a good product, but who don’t want to sell outside of Singapore by putting their products online.
For example, a business owner who had a successful brand of bags asked me if I knew a distributor in Australia. I told him why bother setting up a traditional distribution network when they can go online. But he was reluctant to because he didn’t know how to measure success in an overseas market, as he can’t be physically present to observe footfalls or find ways to drive traffic.
What can be done to convince business owners like him otherwise?
DHL has been working with Enterprise Singapore in providing technical support to SMEs when it comes to payments or logistics. So businesses get a lot of help when it comes to their backend operations.
Where I think they need more support is in demand generation and how to market their products online. This is probably where the government and the trade associations and chambers can provide more assistance.
What has DHL’s own transformation journey been like?
We have already had a lot of success in areas like the use of the latest scanning technology and making use of digital platforms to provide customers with information on where their shipments are.
Of late we have accelerated our digital transformation because so much data has become available. We are able to use this data to generate business intelligence that can help us make better decisions. In our operations arena, for instance, we are able to pull information based on the performance of our B2B and B2C shipments in Singapore.
By setting aside all the residential postal codes, we can have a view on how efficient our B2C deliveries are. From this we can see if there are any patterns, such as locations with higher proportion of failed deliveries. We can show our couriers this information to find out if they are facing any difficulties, and if there are ways we can support them.
We have also started implementing Robotic Process Automation that automates many mundane tasks, freeing up our people to handle higher-value added activities. We also now have physical robots such as AGVs (automated guided vehicle) in our cargo hubs that can move goods around without a driver. This improves safety as they have sensors all around them, and they don’t suffer from fatigue or make misjudgements.
How has the organisation benefited from these initiatives?
We have been able to handle a greater volume without adding more manpower, improving our efficiency and productivity. The other part that is less talked about is the effect that digitalisation has on the motivation of our people.
With digitalisation, our staff are more engaged because they are no longer doing mundane tasks and now have the tools to really help our customers. Especially during this crisis, our people believe that they are connecting people and improving lives.
This drives greater service quality and leads to more loyal customers. And research has shown that repeat customers give us more revenue and profitability. We can then take the profits and reinvest in our people.
What is the next step in DHL’s digitalisation journey?
We have started to explore and experiment with customers on ways of leveraging technology to give them more visibility on when their deliveries are coming, similar to how you can track where your driver is when using the Grab app. The other thing we are doing is using technology to optimise routes for our couriers to drive a higher volume of deliveries.
We are also part of the Federated Lockers programme, which is an initiative by IMDA to roll out smart lockers in as many estates as possible. The aim is that you won’t have to walk more than 200 meters to get to a locker. This supports our drive for efficiency. It is also carbon friendly, as there will be fewer vehicle movements required.